Question
Consider the following fixed basket of goods and services: 100 loaves of bread, 25 bus tickets, 1 Room for Rent. 1 Loaf of Bread Bus
Consider the following fixed basket of goods and services: 100 loaves of bread, 25 bus tickets, 1 Room for Rent.
| 1 Loaf of Bread | Bus Ticket | Price of Room Rental | |
| 2015 | $2.00 | $.05 | $1,000.00 |
| 2016 | $3.00 | $.15 | $1,500.00 |
a, What are the 4 steps to calculating the consumer price index? What is the value of CPI in 2015 and 2016 (Use a base year of 2015)?
b, What was the rate of inflation for this economy from 2015 - 2016?
c, Consider the following: A movie ticket costs $2.40 in 1960. If the CPI in 1960 is 33.25 (Base year: 2015), what is the value of the movie ticket in 2016?
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
